Lean manufacturing begets misconception. Some think a commitment
to lean manufacturing does not provide a competitive edge, nor reduce
remakes and scrap. Others are fearful of a resulting reduction in employees.

Jeff De Lonay, executive vice president, Kolbe & Kolbe Millwork Co.
Inc., Wausau, Wis., and Amar Randhawa, general manager of Durabuilt Windows
and Doors, in Edmonton, Alberta, are both in the business of manufacturing
windows. And both say implementation of lean principles has made a dramatic
impact on all aspects of their companies. And both say they seek to work
with suppliers who share their lean philosophy.

Why is it then that more window companies don’t embrace lean?

“When it comes to our industry it’s not too popular and I am not sure
why,” says Randhawa. “We are a custom manufacturing company—if you come
look at our shipping department you won’t find a window the same as another.
But the mentality is that you can only do it if you make standard products.”

He says that the window industry in general, “doesn’t do lean.” “It is
getting to the point that we want to work with lean suppliers and we are
having a hard time finding them,” he says. “We are trying to share with
them what we do, and this is how we want to receive their materials.”

There are some industry suppliers that do embrace the lean philosophy
and even work with window companies to support and enhance their efforts.

“There are a lot of lean descriptions and some of us who have studied
it for awhile in its root form have a slightly different interpretation
of lean,” says Steve Waltman, vice president of sales and marketing for
Stiles Machinery. “It is a serious pursuit of continuous improvement and
making sure the process is effective as could be.”

He relates it to changing a tire. A person could do it in ten minutes
but in NASCAR, they can do it in ten seconds. “It takes education, practice
and striving for perfection,” he says.

Waltman says lean often becomes watered down. “Some people think: ‘Cut
five people and you’re lean.’ Straighten out the wood pile and call it
lean. People aren’t giving lean its due.”

People
First
In a survey of 100 manufacturers of various products that conducted
lean manufacturing initiatives, nearly 70 percent said they failed
to cut costs by five percent and many survey respondents said any
lean savings achieved were temporary, according to an October 20,
2011 article in Canadian Business. DWM asked Stiles’ Waltman, Kolbe’s
De Lonay and Durabuilt’s Randhawa why this was and all agreed that
those companies must not have had the support of upper management.

When Kolbe started its program, executives met with every employee
and held 20 meetings to explain the process, the culture change and
other crucial factors.

“We told them we want to create additional capacities to increase
sales,” says De Lonay. “You as a leader have to support everything
that will go on.”

He adds that it is important to monitor the system constantly.

“If they are not finding results they are not making the system work,”
he says. “If you are only getting 5 percent gains your targets may
be overly broad and you should refocus on a more exact target or outcome.
”

Waltman says involving all employees is all too obvious to some but
not to others.

“If they did not take into consideration the cultural change that’s
why they failed,” he says. “There also was likely lack of commitment
from the owner and senior manager and lack of communication on the
cultural side. If they don’t involve people up front they will fail.”

Randhawa says anytime Durabuilt takes on a lean project he also deems
it a “people project.” “When people think about lean they automatically
think how much will we save on the bottom line, but you have to focus
on the employees,” he says. “If that doesn’t happen, lean goes sideways.
Here, we see the benefits of lean every day and we saw changes in
three months."

It’s Not Reducing Employees
All three agree that lean does not necessarily mean a reduction in employees.

“When we started lean we were concerned that when the employees heard
the word ‘lean’ they would get it confused with head-count reduction,”
says De Lonay. “We call it continuous improvement. We only use ‘lean’
when we speak to outside vendors.”

Randhawa says lean processes empowers employees. “I used to have a line
outside my office all the time. By implementing lean we empowered our
employees to make more decisions themselves. But you have to be careful
and make sure you have the right people and the right training in place
to do this first. If you have not armed your team with the proper tools
and knowledge, you can fail.”

Indeed, once companies are just starting out toward lean, they need to
be trained. Kolbe started looking into continuous improvement in 2005
and hired a consultant to aid in its efforts. “We aren’t big on consultants
but we knew we needed to be educated,” says De Lonay.

He says, that yes, many companies embark on lean because they want to
be more profitable, increase production, lower costs and increase efficiencies.
But companies must remember that it requires a corporate culture change.
“Once you figure that out all other things will fall into place,” says
De Lonay. (See sidebar at right.)

Durabuilt started down the lean road almost four years ago. Things were
getting slower, but its plant wasn’t downsizing. In fact, the company
was still planning to grow, but needed to do something different.

“We needed to gain some more floor space and if we wanted to grow we needed
to expand our plant but it turned out that wasn’t necessary after implementing
lean,” says Randhawa. “We gained 20 percent of space back in our plant
and increased volume.”

Perhaps before you achieve such great efficiencies you have to look at
the low hanging fruit, says De Lonay. “In the beginning your teams are
doing a lot of experimentation and through different exercises they see
how they can create the process they need.”

Companies can’t look at lean in a single dimension, says Waltman, such
as increasing productivity for employees.

“They are missing opportunities to be lean in other parts of business,”
he says. “Utilities, material usage, scrap handling, paperwork. All of
these can have a lean principle applied to them. It is frustrating that
this is not included in the dialogue. We preach constantly that companies
must consider all the aspects of profitability.”

It Doesn’t Have to Mean Automation
Often the notion that the number of employees will be reduced comes from
the belief that automated machines will take the place of people, which
is not the case. In fact, companies say automated machines aren’t even
integral to being lean.

“From the continuous improvement theory, I want to move around less, I
want to touch things less, so machinery purposes have to be specific to
that,” says De Lonay. “We used to buy big pieces of equipment with multi-functions
but we didn’t have enough flexibility. We had to look at equipment that
was flexible.”

At Kolbe, sometimes that means getting a machine custom-designed. The
company has teams of employees design the machines then sends their designs
to a supplier to be manufactured.

“Sometimes you have to take the best part of a couple of machines,” says
De Lonay. “At times we make them and then we need help in the PLC (programmable
logic controller) area, etc. You sometimes pick and choose and sometimes
you work with a supplier to put together the piece of equipment to your
specification.”

It’s the last piece that is crucial.

“You need to be on the same page as your supplier regarding what lean
means and how to incorporate that into the machine,” says De Lonay. “You
have to work with a vendor that really understands lean. You will start
with some basic questions and ask how they have incorporated lean into
the business.”

“Our machines are flexible and designed to a work cell,” he adds. “Sometimes
they are moved very often or repurposed. Sometimes it’s not big equipment—a
lot of times you can work with smaller types.”

At Kolbe the company is constantly asking important questions: How can
I modify to make 35 windows instead of 10? Sometimes you have to rework
the process,” says De Lonay.

He advises companies ask their machinery suppliers about flexibility and
serviceability. “If things are hidden you will ask yourself why it is
so complex,” he says. “One philosophy of lean is simplicity. Look for
those things and ask them to show you those machines. They will show you
photos and then you look for those principles.”

Waltman explains it as finding the right balance among the many factors
at play. “Yield is a combination of labor and putting the piece into production
at the right time. Automation can do that for you,” he says.

De Lonay says working with suppliers who know a thing or two about lean
is crucial.

“We live in the automation side every day so quite often we have these
robust conversations about what it is a company wants to do in their factory,”
says Waltman. “The debate comes from how much you want to challenge the
status quo and the tribal wisdom of the current process. The factory needs
to be ready to accept a different way of working.”

At Durabuilt, Randhawa doesn’t think it comes down to how much or how
little automation exists in the plant.

“When it comes to software on the equipment it makes an impact,” he says.

If automation isn’t integral to lean is it integral to reducing scrap?

“Reducing scrap is related more to the software that runs and not the
equipment itself,” he says. “We just bought a new line from Sturtz and
didn’t make operational changes but we did make changes to the software
and reducing scrap rates. We made it so that it can run smaller batches
instead of bigger batches. For a cutting line sometimes people think if
you run a bigger batch you gain efficiency and that is not true.”

“Scrap is always the elephant in the room,” adds Waltman. He says vinyl
manufacturers have an advantage that the material can be reused. In wood
manufacturing, companies look at waste in the “chip-to-chip world.” “But
if you study it, scrap is only 10 percent of the problem—90 percent of
it is preparation.”

He also says companies have to change the way they view waste, scrap—or
whatever term you decide to use.

"t’s not just about
wasted materials. There is waste if you need four and you make five. There
is waste if you need to remake it—that’s the worst kind of waste. If you
make it and you can’t find it then there is a waiting waste."
—Steve Waltman, Stiles Machinery

“It’s not just about wasted materials,” says Waltman. “There
is waste if you need four and you make five. There is waste if you need
to remake it—that’s the worst kind of waste. If you make it and you can’t
find it then there is a waiting waste. What if you have to wait a day
before shipping it?”

It Does Provide a Competitive Advantage
Saving materials, money and time are benefits any company would love to
achieve. In the end, companies want to gain more customers and provide
their current ones a distinct competitive advantage and lean fits in nicely
with those goals.

“If you want to make a profit you have to sell something,” says De Lonay.
“The reason you implement lean is for your customer. You have to paint
a picture for them of why you are doing this so they can clearly see it.”

The smarter distributors use it as a selling tool and tell the customer:
The smarter distributors use it as a selling tool and tell the customer:
“My manufacturer is innovative and you will have less quality issues,”
says De Lonay.

“We have implemented lean for three years and have continued to grow and
retain key accounts even in our competitive industry—we have only gained
customers,” he says. “We involve our customers and ask for their input.”

The numbers speak for themselves and it is important to share your lean
stories with customers.

A large part of Kolbe’s business is custom work—75 percent to 80 percent
of its windows are customized in some manner.

“For us a quantifying measure of lean savings is the reduction of charges
to our customer to produce a custom product. In our case, we have been
able to reduce those charges significantly,” says De Lonay.

If you’re not yet convinced of the savings that can be achieved, he encourages
companies to take a serious look at lean.

“In a continuous improvement environment, the goal of reducing costs in
slow times, in excess of 50 percent, can be achieved easily and those
cost savings can be passed to the customer giving you a higher competitive
advantage in the market.”

At Durabuilt, the savings in many areas are impressive.

“We saved close to 25 percent of our footprint in our building, our product
volume is up 30 percent, our lead times were reduced by two weeks (from
five to three), the amount of quality defects are down,” says Randhawa.
“We nearly doubled how much we turn inventory. Lean definitely hits your
bottom line. If it doesn’t then I can’t afford to spend money on lean
initiatives. We want growth and lean helps us achieve that.”

“Some people think that when you are not as busy you shouldn’t keep up
your lean efforts,” says De Lonay. “We haven’t scaled back at all and
we haven’t because everyone is out to get more market share. How do you
do that? Maybe it’s price and maybe it’s innovation and a number of those
go back to continuous improvement and new product development. We felt
we could not afford to reduce our efforts in these areas.”

In fact Waltman believes there are many more serious conversations taking
place than prior to 2008.

When companies make these changes, Waltman says they will find: “I like
the new me. I like having people specifically tasked to do things and
do them well, etc. I like holding down material and freight costs.”

Waltman adds that the successful companies will see that there is another
way to profitability and that means change. If change is not an option
consider the alternative.

“If you don’t like change you are going to hate extinction,” he says.

Tara Taffera is the editor/publisher of DWM/Shelter magazine.
She can be reached at ttaffera@glass.com.
Follow her on Twitter @dwmmag, read her blog at dwmmag.com
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